cdf6f4b9-8a54-4cf6-b3df-cc1e6f8e29a0.pdf


(Incorporated in the Cayman Islands with limited liability)

(Stock code: 838)

Terms of Reference for the Audit Committee (the "Committee") of the Company


Constitution


  1. The Committee is established pursuant to a resolution passed by the board of directors (the "Directors") of the Company (the "Board") at the Board's meeting held on 20 April 2005. The terms of reference of the Committee are revised and adopted by written resolutions passed by the Board dated 12 March 2012 and 24 December 2015.


    Membership


  2. The members of the Committee shall be appointed by the Board from amongst the non- executive Directors of the Company and the Committee shall consist of not less than three members, at least one of whom is an independent non-executive Director with appropriate professional qualifications or accounting or related financial management expertise as required under Rule 3.10(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ("Stock Exchange") (the "Listing Rules"). The majority of the members of the Committee must be independent non- executive Directors of the Company.


  3. The chairman of the Committee shall be appointed by the Board and must be an independent non-executive Director.


  4. The appointment of the members of the Committee may be revoked, and replacement or additional members may be appointed to the Committee by resolutions passed by the Board.


    Attendance at meetings


  5. The finance director of the Company (or any officer(s) assuming the relevant functions but having a different designation) and a representative of the external auditor shall normally attend meetings. The Committee may invite any appropriate person to attend meetings of the Committee. Other Board members shall also have the right of attendance.


  6. The company secretary of the Company shall be the secretary of the Committee (the "Secretary") unless another person is appointed as the Secretary pursuant to paragraph 7 below.

  7. The Committee may from time to time appoint any person (other than the company secretary of the Company) with appropriate qualification and experience as the Secretary.


    Frequency of and proceedings of meetings


  8. Meetings shall be held not less than twice a year. The external auditor may request a meeting if they consider that one is necessary.


  9. Unless otherwise agreed by all members of the Committee, a meeting of the Committee shall be called by at least seven days' notice.


  10. A Committee member may and, on the request of a Committee member, the Secretary shall, at any time summon a meeting of the Committee. Notice shall be given by the Secretary to each member of the Committee in person orally or in writing or by telephone or by facsimile transmission or by electronic communication or in such other manner as the Committee may from time to time determine. Notice of meeting shall state the time and place of the meeting and shall be accompanied by an agenda together with other documents which may be required to be considered by the members of the Committee for the purposes of the meeting.


  11. The quorum of the Committee meeting shall be two members of the Committee.


  12. Members of the Committee may participate in any meeting of the Committee by means of a conference telephone or other communications equipment through which all persons participating in the meeting can communicate with each other simultaneously and instantaneously and, for the purpose of counting a quorum, such participation shall constitute presence at a meeting as if those participating were present in person.


  13. Resolutions of the Committee at any meetings shall be passed by a majority of votes of the members present.


  14. A resolution in writing signed by all the members of the Committee shall be as valid and effective as if it had been passed at a meeting of the Committee duly convened and held.


    Authority


  15. The Committee may exercise the following powers:


    1. to seek any information it requires from any employee of the Company and its subsidiaries (together, the "Group") and any professional advisers (including auditor), to require any of them to prepare and submit reports and to attend Committee meetings and to supply information and address the questions raised by the Committee;


    2. to monitor whether the Group's management has, in the performance of their duties, infringed any policies set by the Board or any applicable law, regulation and code (including the Listing Rules) and other rules and regulations from time to time determined by the Board or a committee thereof;

    3. to investigate all suspected fraudulent acts involving the Group and request the management to make investigation and submit reports;


    4. to review the Group's internal control procedures and system;


    5. to review the performance of the Group's employees in the accounting and financial reporting department;


    6. to make recommendations to the Board for the improvement of the Group's internal control procedures and system;


    7. to request the Board to convene a shareholders' meeting for purposes of revoking the appointment of any Director of the Company and to dismiss any employees if there is evidence showing that the relevant Director and/or employee has failed to perform his/her duties properly;


    8. to request the Board to take all necessary actions, including convening a special general meeting, to replace and dismiss the auditor of the Group; and


    9. to obtain outside legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise, if it considers this necessary.


      Duties


    10. The duties of the Committee shall be:


      1. to be primarily responsible for making recommendations to the Board on the appointment, re-appointment and removal of the external auditor, and to approve the remuneration and terms of engagement of the external auditor, and any questions of its resignation or dismissal;


      2. to review and monitor the external auditor's independence and objectivity and the effectiveness of the audit process in accordance with applicable standards. The Committee should discuss with the auditor the nature and scope of the audit and reporting obligations before the audit commences and ensure co-ordination where more than one audit firm is involved;


      3. to develop and implement policy on engaging an external auditor to supply non- audit services. For this purpose, external auditor includes any entity that is under common control, ownership or management with the audit firm or any entity that a reasonable and informed third party knowing all relevant information would reasonably conclude to be part of the audit firm nationally or internationally. The Committee should report to the Board, identifying and making recommendations on any matters where action or improvement is needed;


      4. to monitor integrity of the Company's financial statements and annual report and accounts, half-year report and, if prepared for publication, quarterly reports, and to review significant financial reporting judgements contained in them. In reviewing

        these reports before submission to the Board, the Committee should focus particularly on:


        1. any changes in accounting policies and practices;


        2. major judgmental areas;


        3. significant adjustments resulting from audit;


        4. the going concern assumptions and any qualifications;


        5. compliance with accounting standards;


        6. compliance with the Listing Rules and legal requirements in relation to financial reporting;


        7. the fairness and reasonableness of any connected transaction and the impact of such transaction on the profitability of the Group;


        8. whether all relevant items have been adequately disclosed in the Group's financial statements and whether the disclosures give a fair view of the Group's financial conditions; and


        9. the cashflow position of the Group;


        10. In regard to (d) above:


          1. members of the Committee should liaise with the Board and senior management and the Committee must meet, at least twice a year, with the Company's auditor; and


          2. the Committee should consider any significant or unusual items that are, or may need to be, reflected in the report and accounts, it should give due consideration to any matters that have been raised by the Company's staff responsible for the accounting and financial reporting function, compliance officer or auditor;


          3. to discuss problems and reservations arising from the interim reviews and final audits, and any matters the external auditor may wish to discuss (in the absence of management where necessary);


          4. to review the Company's financial controls, to review the Company's risk management and internal control systems;


          5. to discuss the risk management and internal control systems with management to ensure that management has performed its duty to have effective systems. This discussion should include the adequacy of resources, staff qualifications and experience, training programmes and budget of the Company's accounting and financial reporting function;

          EVA Precision Industrial Holdings Ltd. issued this content on 2015-12-24 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 2015-12-24 08:32:18 UTC

          Original Document: http://file.irasia.com/listco/hk/evaholdings/announcement/a151224.pdf